Ordinarily, international dealers are not allowed to trade with
Canadian customers in equity or debt securities of Canadian issuers
other than government issuers. There is a narrow exception for new
debt issues only, that allows international dealers to trade with
Canadian "permitted client" customers in new issues of
debt securities by Canadian issuers, but only where those debt
offerings are made primarily outside Canada. But due to the
restriction on secondary market trading, those same international
dealers were not allowed subsequently to make a market with those
Canadian purchasers on those issues. This sometimes made those
dealers reluctant to place bonds into Canada in the first place
knowing they couldn't make a market subsequently for their
Canadian customers.

In their September guidance notice, the CSA staff said they
"acknowledge that concerns over the current drafting may be
affecting the willingness of international dealers to
participate" and that they had been advised that these
restrictions were perceived to be contributing to a decline in
liquidity in the Canadian fixed income markets. The significant
change announced in September's guidance notice was that the
CSA staff said they "do not believe there is a policy reason
to limit the [international dealer] exemption ... to trades that
occur during the initial period of the securities'
distribution." The CSA staff announced they were prepared to
recommend exemptive relief.

The Ontario Securities Commission has now granted, on behalf of
all the CSA provinces, the first few exemptions after that
guidance, in favour of J.P. Morgan Securities LLC and Imperial Capital LLC. The new exemption
decisions allow the exempted international dealers to engage in
secondary market trading with permitted clients in Canada in debt
securities of Canadian issuers, if either:

The debt securities are denominated
in a currency other than Canadian dollars, or

The debt securities are denominated
in Canadian dollars and were originally offered primarily outside
Canada without a prospectus being filed in Canada

If the bonds to be traded are denominated in U.S. dollars, Euros
or any other non-Canadian currency, it will not matter whether they
were originally offered primarily outside Canada. On the other
hand, if the debt securities are denominated in Canadian dollars,
an international dealer would be required to confirm before trading
that the original distribution of the securities had been offered
primarily outside Canada and that no Canadian prospectus had been
filed for the original distribution.

J.P. Morgan had previously been registered in Canada as an
exempt market dealer (EMD), which allowed it then to trade
securities of Canadian issuers without the domicile restrictions
applicable to exempted international dealers. In 2015, however, the
CSA removed the ability of registered EMDs to also rely upon the
international dealer registration exemption, so most, if not all,
of those U.S. broker-dealers gave up their EMD registration, which
had the effect of reimposing upon them the trading restrictions on
international dealers for securities of Canadian issuers. Imperial
Capital had been registered until 2015 as a "restricted
dealer" to the same effect as an EMD. However, J.P.
Morgan's and Imperial Capital's prior registration does not
appear to have been a policy condition for the new exemption, so it
appears that other international dealers that were never registered
as EMDs or restricted dealers are able to apply for a parallel
exemption.

Only the specified exempted firm has the benefit of the
exemptive relief. It cannot be relied upon by others automatically.
The exemptive relief would have to be applied for on a per-firm
basis, citing the recent decision as a precedent.

Rule amendments may be forthcoming eventually to bake similar
relief automatically into the standard international dealer
exemption rule conditions, but there are no plans currently
announced by the CSA to that effect, so any such future rule
changes are uncertain at this time.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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The Ontario government has tabled some long-awaited amendments to the Construction Lien Act. If these amendments pass, they will reshape the contracting framework for owners, contractors, design professionals, subcontractors and other participants involved in major construction projects in Ontario, including P3/AFP projects in the construction industry.

Change, stress and uncertainty are ever]present factors in todayfs legal environment, and specific aspects about the practice of law make it difficult to thrive in the profession long term. Luckily, there are specific research]based strategies that have been shown to help lawyers thrive and lead to more effective ways to manage stress and pressure.

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Blakes is proud to host our New to In-House Series, designed to bring together junior and mid-level in-house counsel for a candid exchange of insights to highlight and address some of the challenges and opportunities facing in-house lawyers in their roles today.

Speaking the language of business is an increasingly important skill for
in-house counsel. This program will help you to understand the key business terms and improve your understanding of financial statements. You will learn from an experienced practitioner about balance sheets, income statements, cash flow statements, ratios and other key business terms and why they are important. This is an essential program for all in-house counsel who want to improve their financial literacy and increase their business acumen. We hope you can join us.

Board independence is a pillar of good corporate governance. It ensures that a corporation's management is properly monitored and that the corporation's decisions effectively balance the various stakeholders' interests.

The use of electronic signatures is becoming increasingly commonplace in commercial transactions, as individuals and businesses capitalize on the administrative efficiency afforded by todays digital world.

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